Indian equities fell sharply on October 8, with losses across every major index.

The Nifty 50 dropped 1.64% to 22,231.80 and the Sensex lost 1.44% to 71,593.24. The broader market took a bigger hit: the Nifty 500 fell 2.01% to 21,616.15 and the BSE 500 fell 1.95% to 33,834.80. The Nifty Midcap 100 shed 2.53% and the Nifty Next 50 shed 2.58%, so growth-oriented segments were hit hardest.

October has started badly. The Nifty 50 is down 1.72% for the month and the Sensex is down 1.22%. For the year, the Sensex is down 15.99%, the worst of the major benchmarks, while the Nifty 50 is down 14.92% and the BSE LargeCap index is down 10.75%. Over twelve months, the Sensex has lost 12.45% and the Nifty 50 has lost 11.24%, so the blue-chip weakness has been building for a long time.

Smaller companies have held up better. The BSE SmallCap index is up 11.93% this year and 23.16% over six months, while the Nifty Smallcap 100 is up 7.54% and 11.04% over the same periods. The BSE MidCap index is down 2.53% for the year but up 3.43% over six months. The BSE LargeCap index is down 6.87% over six months. Money seems to be moving from expensive large caps into lesser-followed stocks rather than leaving the market.

Momentum is weakening, though. Over one month, the Nifty Midcap 100 is down 7.53% and the Nifty 50 is down 5.12%. The key question is whether smallcap strength can last or whether large-cap weakness spreads further. Long-term investors may find value in blue chips after this fall, but near-term volatility is likely to continue.